Productivity Innovations and Plant Dynamics

Authors

  • Raphael Bergoeing Universidad de Chile image/svg+xml
  • Facundo Piguillem Cámara Chilena de la Construcción

Keywords:

total factor productivity, plant dynamics, entry and exit, general equilibrium, resource reallocation

Abstract

The recent empirical evidence shows that plant level dynamics are relevant to explain economic growth. The reallocation of resources across incumbent plants, and the process of entry and exit of plants account for a quantitatively relevant fraction of changes in total factor pro-ductivity; aggregate efficiency in turns is the main source of the observed changes in aggregate growth. In this paper we build a stochastic gene-ral equilibrium model with heterogeneous plants to study the effect on plant decisions of idiosyncratic and aggregate productivity shocks. Para-meterizing the model to represent a developing economy, we analyze the effect of productivity changes on several key macroeconomic varia-bles. Our numerical simulations show that the model accounts for the observed regularities. The model can also be used to study several additional issues related to both, business cycle and long run income levels.

Downloads

Download data is not yet available.

References

Ahn, S. (2001). Firm dynamics and productivity growth: A review of micro evidence from OECD countries. OECD Economic Department Working Papers 297.

Andreoli, D., & Massot, J. (1995). Evidencia de creación y destrucción de empleo en la industria manufacturera Argentina en el período 1990/1995. Universidad de Belgrano, Buenos Aires, Argentina. Mimeo.

Beker, V. (2000). Globalization and unemployment: The case of Argentina. Universidad de Belgrano. Buenos Aires, Argentina. Mimeo.

Bergoeing, R., Hernando, A., & Repetto, A. (2003). Idiosyncratic productivity shocks and plant-Level heterogeneity. Centro de Economía Aplicada, Universidad de Chile. Documento de Trabajo Nº 192.

Bergoeing, R., Kehoe, P., Kehoe, T., & Soto, R. (2002). Policy-Driven productivity in Chile and Mexico in the 80s and 90s. American Economic Review, Papers and Proceedings, 92(2), 16–21.

Bergoeing, R., & Soto, R. (2004). Testing real business cycle models in an emerging economy. En: R. Chumacero y K. Schmidt-Hebbel, eds., General Equilibrium Models of the Chilean Economy, Banking and Development Series, Central Bank of Chile, por aparecer.

Blanchflowers, D., & Burgess, S. (1996). Job creation and job destruction in great Britain en the 80s. Industrial and Labor Relations Review, 50(1), 17–38.

Caballero, R. J., & Engel, E. M. R. A. (1999). Explaining investment dynamics in U.S. Manufacturing: A generalized (S, s) approach. Econometrica, 67(4), 783–826. https://doi.org/10.1111/1468-0262.00053

Caballero, R., & Hammour, M. (1994). On the timing and efficiency of creative destruction. Quarterly Journal of Economics, 109(3), 805–852.

Campbell, J. R. (1998). Entry, exit, embodied technology, and business cycles. Review of Economic Dynamics, 1(2), 371–408. https://doi.org/10.1006/redy.1998.0009

Davis, S., Haltiwanger, J., & Schuh, S. (1996). Job creation and destruction. The MIT Press.

Hansen, G. D. (1985). Indivisible labor and the business cycle. Journal of Monetary Economics, 16(3), 309–327. https://doi.org/10.1016/0304-3932(85)90039-x

Hopenhayn, H. A. (1992). Entry, exit, and firm dynamics in long run equilibrium. Econometrica, 60(5), 1127–1150. https://doi.org/10.2307/2951541

Jovanovic, B. (1982). Selection and the evolution of industry. Econometrica, 50(3), 649. https://doi.org/10.2307/1912606

Navarro, L., & Soto, R. (2001). Procyclical productivity: Evidence from an emerging economy. Banco Central de Chile, Documentos de Trabajo Nº 109.

Parente, S. L., & Prescott, E. C. (2000). Barriers to riches. The MIT Press. https://doi.org/10.7551/mitpress/1519.001.0001

Piguillem, F. (2003). Políticas de incentivos con entrada y salida de plantas en competencia imperfecta. Tesis de Grado. Programa de Postgrado en Economía ILADES/Georgetown University, Santiago, Chile.

Roberts, M., & Tybout, J. (1997). Industrial evolution in developing countries: Micro patterns of turnover. Productivity, and Market Structure. Oxford University Press.

Rogerson, R. (1988). Indivisible labor, lotteries and equilibrium. Journal of Monetary Economics, 21(1), 3–16. https://doi.org/10.1016/0304-3932(88)90042-6

Downloads

Published

2003-10-31

How to Cite

Bergoeing, R., & Piguillem, F. (2003). Productivity Innovations and Plant Dynamics. Economic Analysis Review, 18(2), 3–32. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/28

Issue

Vol. 18 No. 2 (2003)

Section

Articles

License

Copyright (c) 2003 Raphael Bergoeing, Facundo Piguillem

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Article usage

ViewsTimes this article's page was opened since the journal started recording statistics. One person can visit more than once.
228
DownloadsTimes the full text of this article (usually the PDF) was opened or downloaded.
229

All time, as recorded by the journal.

Last 2 years: 67 views, 116 downloads.

1.00 downloads per view (journal average 1.65).Downloads of the full text for every abstract view of this article, compared with the whole journal.

Explore the journal's metrics